Burgan Bank A.Ş. Turkey (BBT)

Transcription

1 Burgan Bank A.Ş. Turkey (BBT) March 2018 Presentation (BRSA Consolidated) Burgan Bank Group 1 Burgan Kuwait Bank Turkey - Iraq March Algeria 2014 Tunisia 1

2 Operating Environment Macro Economic Outlook - Turkey Recent Developments Ratings Key Indicators (*) Source: Burgan Bank Macroeconomic Research 2 Burgan Bank Turkey March 2018 Burgan Bank Turkey - March 2014 Fitch Moody s S&P Long Term FC Rating BB+ Ba2 BB- Outlook Stable Stable Stable F(*) Nominal GDP (USD bn) Population (mn, mid-year) GDP per capita (USD) 10,883 10,597 10,500 Real GDP (% change) CPI Inflation (year-end) Gov.Debt (USD bn) Gov. Debt / GDP Current Account Bal. / GDP Forex Reserves (USD bn) Trade Balance (USD bn) Export (USD bn) Imports (USD bn) The Turkish economy posted 7.4% yoy in 2017, the highest growth rate of the last seven years, thanks to the incentives of the government to stimulate economic activity and employment as well as the recovery in economic activity in Europe. Economic growth remains strong in 1Q18, followed by an expected normalisation in 2Q18 and a slowdown in 2H18. Current account deficit widened to 5.6% of GDP by end-2017, driven by higher gold and energy imports. Despite stronger exports and tourism revenues, external deficit is projected to widen further in 2018 as a result of the acceleration in imports. Amid increasing current account deficit, rising concerns on high external debt of the private sector and deteriorating sentiment on EM, the Turkish Lira weakened further by 20% since the beginning of Annual inflation accelerated to the highest level of the last 14 years in 2017 on the back of buoyant domestic demand, FX passthrough and elevated food inflation. It is projected to remain high at double-digit levels throughout 2018 mainly due to weaker TRL and higher oil prices. The CBT has been tightening the monetary policy stance since end in response to the currency depreciation and deterioration in inflation outlook. The Weighted Average Funding Rate of the CBT has risen more than 500bps to 13.5% as of April

3 Operating Environment Turkish Banking Sector Number of Banks: 52 ( Including 5 Participation Banks) Number of Depository Banks: 34 Growth (billiontry) YoY YTD Total Assets Total Deposits 2,866 3,258 3, % 3.6% 1,518 1,711 1, % 3.9% Total Loans 1,844 2,111 2, % 3.4% Total Assets (blntry) 8% 8% 12% 3,258blnTRY 65% 7% Loans Liq.Assets Securities MRR Other 11% 5% 3% Total Liabilities 15% 13% 3,258blnTRY 53% Deposits Borrowings Funds Un.Repo Issued Sec. S/H Equity Other Net Profit % 13.4% Key B/S Ratios(%) miotl ROA ROE NPL CAR NIM Coverage Loan/Deposit Total Assets/GDP Total Loans/GDP ,400 2,200 2,000 1,800 1,600 1,400 1,200 1, ,227 TL Loans & TL Deposits 842 1,428 1, ,400 2,200 2,000 1,800 1,600 1,400 1,200 1, FC Loans & FC Deposits Total Deposits/GDP TL Loans Loans/Deposits TL Deposits FC Loans Loans/Deposits FC Deposits Source: BRSA 3 Burgan Bank Turkey March 2018 Burgan Bank Turkey - March

4 Burgan Bank K.P.S.C. Sound and Consistent Financial Performance One of the leading financial institutions with a growing presence in the MENA region as a subsidiary of KIPCO (Kuwait Projects Company) Listed on Kuwait Stock Exchange with a market cap of US$ 2.0bn (1) Has a strong domestic franchise with 14.1% market share of assets in Kuwait International presence with its subsidiary/group banks in different regions: Turkey Burgan Bank A.S. Algeria Algeria Gulf Bank Loans by Operations Revenues by Operations Iraq Bank of Baghdad Tunis Tunis International Bank 2% 0.1% Ratings Bank Sovereign Moody s A3 Aa2 S&P BBB+ AA Fitch A+ AA Financial Performance Q Revenue Growth (YoY) 10% Net Profit Growth (YoY) (2) 5% Cost to Income Ratio 46.2% Loans to Cust. Deposits 110.2% Liquidity Ratio 24.7% NPA Ratio 2.7% NPA net of Collateral Ratio 0.7% ROTE (2) 12.4% 1% 9% 27% 63% Kuwait Algeria Iraq Turkey Tunisia International operations contributing 37% in Loans and 47% in Revenues Burgan Bank, Turkey is ranked as the biggest contributor among Burgan Subsidiary Banks in loans share as well as revenue generation (1) Closing Price on 31/03/2018 (2) Excluding precautionary provisions and after AT1 cost Note: Growth figures based on US$. 24% 5% 16% 53% 4 Burgan Bank Turkey March 2018 Burgan Bank Turkey - March

5 Burgan Bank A.Ş. At a Glance Incorporated in 1989 as Tekfen Yatırım Bankası AŞ Became a Burgan Group member as of December Burgan Bank K.P.S.C. acquired 99.26% of its shares. Enables better service and strengthens client relationships through its subsidiaries: Burgan Leasing Burgan Securities Burgan Wealth Limited Dubai Rated by : Fitch Ratings ( ) Long Term Global Local Currency : BBB- Outlook : Stable Segment-wise Branch Distribution 1 2 Corporate Branch 43 Branches across 16 cities where 79% of loans&deposits of the whole sector are held Branches 9 Business Centre (Providing Commercial Banking Services) Retail Branches Combo Branches (Providing Commercial+Retail Banking Services) 5 Burgan Bank Turkey March 2018 Burgan Bank Turkey - March

6 2018 Achievements Growth Total asset size increased by 21.2% compared to Q12017 (banking sector %) The loan book grew by 25.3 % compared to Q12017 (banking sector 18.5%) Deposit volumes are up by 3.8 % compared to Q12017 and reached to 9,3 billion TL Asset Quality NPL ratio decreased to 2.9% with the improvement of asset quality (banking sector - 2.9%) Funding Diversification of funding sources continued; USD 46mn new funding generation from the international markets Sound customer deposit base, deposits account for 48.1% of total liabilities Capital Well positioned Capital Base with a CAR of 17.2% and Tier 1 Ratio of 8.8% (all sub-debt from parent) Profitability Net profit reached to 48.5 mio TL (133% yoy increase) Others Continuous investment in People and Technology: Management trainee program, digital banking, risk management systems Highest possible investment-grade credit rating in Turkey by Fitch, BBB- as of March Burgan Bank Turkey March Burgan Bank Turkey - March

7 Performance Trends Sustainable Balance Sheet Growth Balance Sheet (million TRY) YoY YTD Total Assets 15, , , % 3.0% Loans 1 12, , , % 2.2% Securities % 6.5% Deposits 8, , , % 4.8% Borrowings 3, , , % 4.0% Subordinated Loan(*) 1, , , % 4.7% Shareholders Equity 1, , , % -7.2% Balance Sheet Ratios Loans / Assets Securities / Assets Loans / Deposits 78% 81% 81% 5% 2% 2% 139% 172% 168% Loans / Deposits 2 105% 121% 118% (1) Factoring and Leasing Receivables Included (2) Burgan Group borrowings included Total Assets Total Liabilities Loans; 81% Liquid Assets; 11% Securities; 2% Other; 6% Borrowings 33% Deposits 48% Shareholder's Equity 7% Funds from ISE MM&under Repurchase Agreement 1% Other 5% Sub Loan(*) 6% (*) Burgan Group funding 7 Burgan Bank Turkey March Burgan Bank Turkey - March

8 Loan Growth Above The Market Average Commercial and Corporate Loans the biggest contributor Loan composition by sector Wholesale& Retail Trade; 18% Real Estate; 5% Financial Int.; 9% Tourism; 10% Loan composition by customer segment Corporate 26% Commercial 70% Mining; 2% Real Estate Development; 9% Agriculture; 0% Others; 14% Contracting; 13% Manufacturing; 18% Retail 4% Loan Growth(billion TRY) Burgan Bank Turkey March Burgan Bank Turkey - March FCY Loans TL Loans Loan balance including leasing receivables has increased by 25 % compared to Q12017 and reached to TL 15,595 mn. Growth Corporate 19% Commercial 25% Retail 94% Total 25% 8

9 Rising Funding Availabilities Well Diversified Funding structure (million TRY) YoY YTD Deposits 8,952 8,872 9, % 4.8% Borrowings 3,550 6,083 6, % 4.0% Intergroup Funding 1,783 2,627 2, % 5.4% Syndication % 6.1% Oth. Bank Borrowings 1,143 2,559 2, % 2.3% Eximbank % -4.5% Sub Debt(*) 1,093 1,141 1, % 4.7% Money Market&Repo % -19.2% Other Liabilities % 44.8% Shareholder s Equity 1,122 1,512 1, % -7.2% Breakdown of Funding (million TRY) 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Other Liabilities Money Market&Repo Sub Debt(*) 1,093 1,141 1,195 Shareholder's Equity 1,122 1,512 1,404 Intergroup Funding 1,783 2,627 2,767 Other Bank Borrowings 1,767 3,456 3,556 Deposits 8,952 8,872 9,295 Commitment of Burgan Bank K.P.S.C. continues with a balance of 1,003mioUSD in intergroup funding including sub-debt. Third party funding sources continued to increase through strong cooperation with Correspondent Banks. (*) Burgan group 9 Burgan Bank Turkey March Burgan Bank Turkey - March

10 Deposits are the Main Funding Source FX Deposits the biggest share Key 9 Months Highlights 2013: Key Highlights Deposit composition by maturity 1-3 month 71% 3-6 month 8% 6-12 months 2% Deposit composition by customer segment Commercial 13% Corporate 21% 1 year + 2% Retail 66% up to 1 month 17% Deposit Growth(billion TRY) Burgan Bank Turkey March Burgan Bank Turkey - March 2014 FCY Deposits TL Depositss Total Deposits increased by 3.8 % compared to Q12017 whilst the sector average was 17%. Retail deposits continue to be the major contributor in the deposit composition. Well diversified deposit portfolio. The Total of Top 20 deposits receives a share of 19.7% out of Total Deposits. 10

11 Improved Asset Quality NPL ratio below the market average NPL Ratio (%) NPL Ratio Sector Coverage Ratio (%) Coverage Ratio(*) Sector Gross Loans (million TRY) 9,332 15,478 16,252 NPL s(million TRY) NPL Ratio 2.6% 2.6% 2.9% NPL coverage 53.5% 55.5% 54.7% Asset quality remains strong with NPL ratio of 2.9% at the same level as the sector average of 2.9% Provisioning is in line with BRSA rules and regulations. Coverage ratio is below sector average due to the collateral structure of the Loan portfolio. (*) Excluding general provisions 11 Burgan Bank Turkey March Burgan Bank Turkey - March

12 Strong Capitalization to Support Future Growth Shareholder s Equity (million TRY) Capital Base Inc. Sub-Debt (million TRY) 1,122 1,512 1,404 2,214 2,645 2,790 CAR Ratio (%) Tier 1 Ratio (%) CAR and Tier 1 ratios consistently well above minimum requirements of 12% and 6.0%, respectively. Shareholder supported the Bank by providing long term subordinated loans, to be converted into the capital whenever it is needed. 12 Burgan Bank Turkey March Burgan Bank Turkey - March

13 Progress in Earnings (million TRY) YoY YTD Total Interest Income , % 25.5% Total Interest Expense , % 24.1% Net Interest Income % 28.2% Operating Profits (million TRY) Total Revenues % 29.4% Total Operating Expenses % 1.9% Operating Income % 70.1% Provision % 65.9% Net Profit % 76.8% Net Profit (million TRY) NIM Trends(%) 4 Revenues(million TRY) The bank s cost to income ratio decreased to 47.0% as of March 2018 from 61.3% as of March Burgan Bank Turkey March Burgan Bank Turkey - March

14 Outlook for 2018 Growth Continue above sector growth while; Focusing on collateralized loans Decreasing concentration and increasing spreads Focusing on new alternative channels &digital banking in retail banking Profitability Focus on NIM Aim to keep cost of credit at 2018 level Focus on efficiency improvement in Cost / Income ratio Increase cross sale (insurance, treasury sales etc. ) to optimize RWA consumption Human Capital Invest in human capital through management trainee programmes Employer branding project Emphasis on corporate culture and values Investment in management trainee program Funding Continue to diversify funding base Enhance the funding lines with counter parties Tap both local and international wholesale markets with bond issuances 14 Burgan Bank Turkey March Burgan Bank Turkey - March

15 Contact Details Treasury, Capital Markets and Financial Institutions Group Mr. Mutlu Akpara Executive Vice President Financial Institutions Ms. Şehnaz Günay, Head of FI Treasury & Capital Markets Mr. Arda Türerer, Head of Trading & ALM Ms.Inci Yılmaz, Unit Manager Ms. Aslı Koçer, Head of Treasury Sales Ms. Ezgi Yıldırım, Unit Manager Mr. Bilge Gönen, Head of FX Desk Maslak Mahallesi, Eski Büyükdere Caddesi No: Sarıyer Istanbul Turkey Swift: TEKFTRIS Reuters: BRGN 15 Burgan Bank Turkey March Burgan Bank Turkey - March

16 Thank you 16 Burgan Bank Turkey March Burgan Bank Turkey - March